Politics
Modi calls Trump tariffs ‘unjustified’, unveils tax cut incentives
Indian Prime Minister Narendra Modi’s plan to reduce consumption taxes on everyday goods could provide billions of dollars in annual relief and stimulate demand in an economy preparing for potential US tariffs, experts say.
US President Donald Trump has warned he may double import duties on India from 25% to 50% in response to New Delhi’s purchase of Russian oil, arguing such transactions help Moscow finance its war in Ukraine.
The threat has cast uncertainty over the outlook for the world’s fifth-largest economy, with Indian exporters cautioning about declining orders and significant job losses.
Calling Washington’s move “unfair, unjustified and unreasonable,” New Delhi is working to cushion the impact.
Modi, during his recent Independence Day address, pledged to “reduce the tax burden on the common man.”
The proposed cuts to the goods and services tax (GST) would make items ranging from small cars to air conditioners more affordable for consumers, according to economists.
Currently, the GST functions under a four-tier structure, with rates spanning from five to 28%. Under Modi’s plan, most goods would be simplified into just two categories, taxed at either five or 18%.
The Indian leader has called the change a “Diwali gift”, a reference to the annual Hindu festival of lights when consumers splurge on everything from gold and clothes to consumer electronics.
‘Sizeable savings’
Trump’s tariffs — and their impact on ordinary Indians will hinge on how much progress is made towards a Russia-Ukraine peace deal, and whether New Delhi can secure alternative oil suppliers before the US president’s August 27 deadline.
But experts say Modi’s tax reform could help shore up demand by reducing tax collections by between $13 billion and $17 billion.
Analysts at Emkay Global Financial Services called the policy a “welcome reform towards boosting domestic consumption”.
They estimated that about the vast majority of items currently subject to the top 28% rate would be taxed at 18%, while “nearly all” in the 12% tier would move into the 5% bracket.
Analysts at Motilal Oswal, an Indian financial services firm, said the changes would bring benefits to a wide range of sectors and “sizeable savings” to households.
The fate of the proposal ultimately rests with the GST Council, which includes representatives from state governments and has struggled to achieve broad consensus in the past.
If approved, the cuts would strain public finances, according to experts.
However, they said, they could also help to offset tariff risks and burnish Modi’s credentials among the middle class.
The proposal comes ahead of expected elections later this year in Bihar, a large, Hindu-majority state of 130 million people that is a key political battleground for Modi.
“The popular economic narrative right now is that of Trump’s 50% tariffs and how the US-India relationship is seeing setbacks,” Deepanshu Mohan, economist at OP Jindal Global University, told AFP.
“The GST readjustment is a strong response from Modi in that context. It’s Modi telling the middle class: ‘We are trying to make sure you have enough at your end,'” Mohan said.
But, he added, it was also an acknowledgement that India’s economy had not worked for its “low middle-income class for some time”.
US-India Trade Tensions
Although economists have long urged an overhaul of the GST framework, Modi’s unexpected announcement comes at a time when US-India relations have sunk to a multi-decade low.
Experts warn that without a trade agreement, Trump’s proposed tariffs could push India’s GDP growth below 6% this fiscal year lower than the Reserve Bank of India’s projection of 6.5%.
India’s position on Russian oil imports will become clearer by late September, as most of this month’s shipments were contracted before Trump’s threats, according to trade intelligence firm Kpler.
Kpler analyst Sumit Ritolia told AFP that while Indian refiners are showing “growing interest” in US, West African, and Latin American crude, this reflects “greater flexibility, not a deliberate pivot.”
“Unless there is a clear policy shift or a sustained change in trade economics, Russian supplies will remain a central part of India’s crude basket,” Ritolia added.
Meanwhile, the outlook for US-India trade talks remains uncertain as the tariff deadline draws closer.
New Delhi insists it is committed to reaching a deal, but Indian media reports suggest Washington has postponed a planned late-August negotiating visit to New Delhi.
Bosnia’s national museum has defended a decision to donate funds from the display of a precious Jewish manuscript to the people of Gaza.
It said ticket sales to see the Sarajevo Haggadah, one of the most precious religious manuscripts of the Middle Ages, would be donated to “support the people of Palestine who suffer systematic, calculated and cold-blooded terror, directly by the state of Israel”.
The move drew intense criticism earlier this month from Jewish organisations, with some abroad accusing the museum of antisemitism.
But museum director Mirsad Sijaric, 55, stood by the decision and said he had received numerous messages of support from Jewish people around the world.
“Did we choose one of the sides? Yes, we chose one of the sides,” Sijaric told AFP.
‘Politicisation’
The museum’s donation will also include sales from a book about the Haggadah.
Sijaric insisted the move was “absolutely not” directed against Jewish people, but was instead a message of opposition to what was happening in Gaza.
“Feigning neutrality is siding with evil. In my opinion, this is pure evil, and one must oppose it.”
Several Jewish organisations criticised the museum’s announcement, including the New York-based Anti-Defamation League, which labelled it a “politicisation” of a “symbol of heritage, survival, and coexistence”.
Sitting in a glass cabinet in a specially designed room in the museum, the Haggadah has long been a treasured symbol of Sarajevo´s diversity.
The majority-Muslim city is also home to just under a thousand Jewish people.
Symbol of ‘shared life’
The Haggadah’s illuminated and well-preserved parchment pages narrate the creation of the world and the exodus of the Hebrews from Egypt.
Dating back to 1350, the intricately illustrated manuscript is believed to have been written near Barcelona, and brought to Sarajevo by Jews who were expelled from Spain in 1492.
It survived Nazi occupation and was kept safe during intensive shelling in the Bosnian War of the 1990s.
Jakob Finci, president of the Bosnian Jewish community, described the move as “bizarre” and “a bit offensive”.
“It tarnishes Sarajevo´s reputation and that of the Sarajevo Haggadah, the book that for many years has borne witness to Sarajevo´s multiethnic character and our shared life,” Finci said.
“I’ve heard a lot of criticism [of the move]… I have not seen any praise.”
Long kept in a safe and rarely displayed, the book has been more accessible since the special room opened in 2018 after a renovation paid for by France.
Its rich history and rarity continue to draw visitors and academics to the museum.
“I think it’s a way to support the situation of the Palestinians in Gaza,” said Italian Egyptologist Silvia Einaudi after viewing the manuscript.
“Gaza, why not?” said French visitor Paul Hellec. “It’s a tough topic at the moment. But there are also many other places where people are suffering.”
The war in Gaza was sparked by Hamas’s October 2023 attack on Israel, which resulted in the deaths of 1,219 people, mostly civilians, according to an AFP tally based on official figures.
Out of 251 hostages seized by Hamas, 49 are still held in Gaza, including 27 the Israeli military says are dead.
Israel’s retaliatory offensive has killed at least 62,819 Palestinians, most of them civilians, according to figures from the health ministry in Hamas-run Gaza that the United Nations considers reliable.
Media restrictions in Gaza and difficulties in accessing many areas mean AFP is unable to independently verify the tolls and details provided by the civil defence agency or the Israeli military.
- Xi to review troops, military hardware at Tiananmen Square.
- Parade marks Japan’s WWII surrender anniversary on Sept 3.
- Belarus, Iran, Indonesia, Serbia leaders amongst attendants.
BEIJING: Russian President Vladimir Putin and North Korea’s Kim Jong Un will attend a military parade in Beijing, marking the first public appearance of the two leaders alongside President Xi Jinping in a show of collective defiance amid Western pressure.
No Western leaders will be among the 26 foreign heads of state and government attending the parade next week with the exception of Robert Fico, prime minister of Slovakia, a European Union member state, according to the Chinese foreign ministry on Thursday.
Against the backdrop of China’s growing military might during the “Victory Day” parade on September 3, the three leaders will project a major show of solidarity not just between China and the Global South, but also with sanctions-hit Russia and North Korea.
Russia, which Beijing counts as a strategic partner, has been battered by multiple rounds of Western sanctions imposed after its invasion of Ukraine in 2022, with its economy on the brink of slipping into recession. Putin, wanted by the International Criminal Court, last travelled in China in 2024.
North Korea, a formal treaty ally of China’s, has been under United Nations Security Council sanctions since 2006 over its development of nuclear weapons and ballistic missiles. Kim last visited China in January 2019.
Those attending the parade marking the formal surrender of Japan during World War II will include Belarus President Aleksandr Lukashenko, Iran’s President Masoud Pezashkian, Indonesian President Prabowo Subianto and South Korea’s National Assembly Speaker Woo Won-shik, said Chinese Assistant Foreign Minister Hong Lei at a news conference.
Serbia’s President Aleksandar Vucic will also attend the parade.
The United Nations will be represented by Under-Secretary-General Li Junhua, who previously served in various capacities at the Chinese foreign ministry, including time as the Chinese ambassador to Italy, San Marino and Myanmar.
On the day, President Xi Jinping will survey tens of thousands of troops at Tiananmen Square alongside the foreign dignitaries and senior Chinese leaders.
The highly choreographed parade, to be one of China’s largest in years, will showcase cutting-edge equipment like fighter jets, missile defence systems and hypersonic weapons.
The Israeli military escalated its operations in and around Gaza City on Wednesday, targeting key areas amid ongoing tensions in the region. This military activity comes as U.S. President Donald Trump prepared to host a high-level meeting at the White House to discuss post-war strategies and reconstruction plans for the devastated Palestinian territory.
Officials highlighted the urgent need for coordinated efforts to address humanitarian challenges, restore infrastructure, and provide aid to civilians affected by the conflict, while also navigating the complex political and security dynamics in the region.
Israel is under mounting pressure both at home and abroad to end its almost two-year campaign in Gaza, where the United Nations has declared a famine.
Mediators have circulated a truce proposal which has been accepted by Palestinian militant group Hamas.
Whose October 2023 attack triggered the devastating war. But Israel has yet to give an official response.
On the ground, Gaza’s civil defence agency said Israeli strikes and gunfire killed at least 24 people on Wednesday.
The Israeli military, which is preparing to conquer Gaza City, said troops were operating on the outskirts of the territory’s largest city .
“To locate and dismantle terror infrastructure sites”.
As aid groups have warned against expanding the Israeli offensive, the army’s Arabic-language spokesman.
Avichay Adraee, said on X that Gaza City’s evacuation was “inevitable”.
The vast majority of the Gaza Strip’s population of more than two million people have been displaced at least once during the war.
In Jabalia, just north of Gaza City, resident Hamad al-Karawi said he had left his home after a message broadcast from a drone ordered people to evacuate immediately.
“We scattered out onto the streets with no place or home to take refuge in,” he told AFP.
The UN estimates that nearly a million people currently live in Gaza governorate, which includes Gaza City and its surroundings in the north of the territory.
Donald Trump’s special envoy Steve Witkoff said the US president would host top officials at the White House later on Wednesday to thrash out a detailed plan for post-war Gaza.
“It’s a very comprehensive plan we’re putting together,” Witkoff told Fox News, without offering more details.
Trump stunned the world earlier this year when he suggested the United States should take control of the Gaza Strip.
Clear out its inhabitants and redevelop it as seaside real estate.
Israeli Prime Minister Benjamin Netanyahu praised the proposal which sparked a global outcry.
In Gaza City’s Zeitoun neighbourhood on Wednesday, residents reported heavy Israeli bombardment overnight.
“Warplanes struck several times, and drones fired throughout the night,” said Tala al-Khatib, 29.
“Some neighbours have fled… But wherever you flee, death follows you,” she said.
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